Sage Offers Partners Better Deal For Subscription Application Sales

Sage North America is making changes to its partner program, including boosting margins that partners earn for software subscriptions and introducing a new partner tier structure that channel managers said would simplify partner compensation across the company's product portfolio.

The company, which focuses on midmarket businesses, also is launching a channel dashboard designed to provide partners with detailed information about Sage customers and their interactions with the vendor.

The changes come two months after Sage named former Microsoft channel executive Donald Deshaies the company's new vice president of channel management. Deshaies takes the post held by channel veteran Tom Miller, who retired in early 2013.

"I'm very happy with the changes they're making," said Joe Arnone, president of BAASS Business Solutions, a Thornhill, Ontario-based solution provider that works largely with Sage, but also does some work with NetSuite and Deltek. "Overall, I think Sage is very channel-focused."

Sage introduced the subscription pricing option for Sage applications two years ago, paying partners 35 percent of the value of a subscription contract's first year and 20 percent of each renewal year. Some partners complained that move hurt them financially by undercutting the profit margins they made selling perpetual licenses. Some even began working with Sage competitors such as NetSuite, Salesforce and SugarCRM.

Under the new plan, Sage will pay the same margins for the first year of a subscription contract as it does for perpetual license sales. After that the company will pay 25 percent of a contract's value, up from 20 percent.

Arnone praised the move, saying it will encourage partners to offer subscription pricing as an option and help keep Sage customers from switching to other vendors.

Sage is simplifying its partner compensation program by combining what is now 10 tier schedules across the company's product lines to just two schedules. The company also is eliminating a new-license threshold partners previously had to meet to move up, with tier attainment now based on total revenue from all Sage-related sales.

"I like the fact a dollar is a dollar," said Arnone, who was briefed on the partner program changes.

Sage also is offering potentially higher margins for partners who are growing their Sage business. And the vendor's product multiplier now applies to several products, providing partners with an incentive to cross-sell.

Partners who hit tier thresholds can move up on a weekly basis, rather than wait until the start of the next quarterly measurement period. "It's highly beneficial [for partners] in how they get paid," Deshaies said. The measurement periods remain at four quarterly calculations and the product tier calculation methodology remains a rolling 12 months based upon product tier attainment.

The changes are scheduled to take effect July 1. Deshaies said Sage worked with a number of channel partners in developing the new initiatives. "It was a community discussion," he said.

The new Sage Advisor Dashboard for Partners, meanwhile, will allow partners to look up a customer's support/service call history, check on contract expiration dates and renewals, and integrate customer information with the solution provider's own CRM system. Sage is hoping that partners armed with such information will be in a better position to serve as business advisers, generate more cross-sell opportunities, and create more targeted marketing campaigns.